As I alluded to over on this EconLog post, economic discussions often reduce to two camps:Morgan thought that was inexplicable.
•People who think of the economy in a very simplistic (essent[ia]lly cartoonish) way, abstracting away all details and likening it to a machine you can control and tune – tweaking dials, pulling levers, opening valves, priming pumps.Now, fine. Two approaches, to each his own, right? But here’s what I find astonishing:
•People who don’t, and who instead think the economy is pretty complicated, and details matter.
The former group thinks they are Smart and they look down with sneering contempt on the intelligence of the latter group.
Actually, it’s pretty explicable.
They think economics is a “science”. It really isn’t, for the same kinds of reasons psychology is not a science. If it were, and the “scientists” (economists) were correct, then of course the Economy should be run by “experts” through the State. Anyone who believes otherwise is obviously “unscientific” in their eyes.
It goes further. “Experiments” in economics look like the USSR, Cuba, the New Deal, The Raw Deal (Obama ) China, North Korea, and to a bit lesser extent … Europe. So what do we have here (theoretically) in America?
The fact of the matter is is that Economics is a part of human behavior. It cannot be dictated any more than our hunger or other drives. Economics is a study in what people value, how much and how much they value it compared with other things. You can’t dictate that. It just is. And when you mess with it, well … how’d that old ad go? It’s not nice to fool Mother Nature!
Capitalism is not so much an economic plan, but a recognition that there can be no economic plan that is compatible with Liberty. It’s more like an economic “lack of plan”, or more accurately, millions and millions of micro-economic plans working together in symbiosis on their own, creating and breaking associations as each sees fit in the persuit of happiness. It is an “ism” to economics as nihilism is an “ism” to philosophy.
Of course, they don’t get any of that. It’ s much more reassuring to believe there is, or can be, someone with an Economic Plan™ than will “work” than it is to believe that the best economic plan is to Let It Be. Our plan is to have no plan, or to plan to let everyone plan their own plan.
Now that is a true “collective” plan!